Bringing data center management and technology into the 21st Century

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This talk is a slightly modified and condensed version of one I gave at DCD Converged in London on the morning of November 19, 2014. I gave it at VIP dinner sponsored by Siemens on the evening of that same day. I moved "One boss, one team, and one budget" to be the 2nd thing management can do, because tying IT to business performance with metrics is a prerequisite to doing the hard work of busting the silos. I realized this during the talk ("One boss, one team, and one budget" was original item #1).

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Bringing data center management and technology

into the 21st century Jonathan Koomey, Ph.D.

Research Fellow, Steyer-Taylor Center for Energy Policy and Finance, Stanford University

http://www.koomey.com Presented at DCD Converged

London, UK November 19, 2014

1  Copyright  Jonathan  G.  Koomey  2014  

Can you answer these key management questions?

•  How many servers do you have? •  How many of the servers are comatose? •  What is the average utilization for those that

aren’t comatose? •  Do you track costs and benefits from data

center operations each year? – Total? – At the business unit level? – At the project level?

Copyright  Jonathan  G.  Koomey  2014   2  

Most companies can’t!

3 Copyright  Jonathan  G.  Koomey  2014  

What do executives need to know about information

technology (IT)?

4  Copyright  Jonathan  G.  Koomey  2014  

Modern businesses can’t succeed without IT

5  

Brynjolfsson, Erik, and Andrew McAffee. 2014. The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies. New York, NY: W. W. Norton & Company. [http://amzn.to/1gYHEGk]

Copyright  Jonathan  G.  Koomey  2014  

However…

6  Copyright  Jonathan  G.  Koomey  2014  

IT is almost invariably fragmented and divorced from

business performance Only management can fix that

7  Copyright  Jonathan  G.  Koomey  2014  

Almost all enterprise data centers are paragons of inefficiency, but management doesn’t know it, so

they don’t fix it.

8 Copyright  Jonathan  G.  Koomey  2014  

Inefficient IT increases costs, decreases revenues, AND

reduces the rate of innovation

9 Copyright  Jonathan  G.  Koomey  2014  

What can management do?

10 Copyright  Jonathan  G.  Koomey  2014  

I. Tie IT performance to business performance

11  Copyright  Jonathan  G.  Koomey  2014  

How?

12  Copyright  Jonathan  G.  Koomey  2014  

Metrics!

13  Copyright  Jonathan  G.  Koomey  2014  

Creating the right metrics is not as easy as it sounds

14 Copyright  Jonathan  G.  Koomey  2014  

How far are you from this?

Copyright  Jonathan  G.  Koomey  2014   15  

ProfitsComputation

= (Revenues - Costs)/Computations

Complexities •  Some parts of IT are really cost centers, but

some generate revenues •  Hard work needed to build up to revenues

and costs/computation – Activity based costing (Romonet) – Detailed cost and inventory modeling (Apptio) – Server based inventory and operations (DCIM)

•  Computations –  first order estimate = utilization * GHz * secs/year

(good enough to start)

Copyright  Jonathan  G.  Koomey  2014   16  

Metrics drive organizational change

•  Focus on the whole system –  reducing total costs per computation –  increasing total value from computation

•  “Show back” the consequences of choices to every employee, then “charge back” if needed

•  Key Performance Indicators (KPIs) for management include both costs AND benefits

17  Copyright  Jonathan  G.  Koomey  2014  

You need a model of costs and revenues that tracks all

components in the data center over time!

18 Copyright  Jonathan  G.  Koomey  2014  

II. One boss, one team, one budget!

19  Copyright  Jonathan  G.  Koomey  2014  

III. Use IT to transform IT

•  Standardized IT deployments •  Move from “sit down restaurant” to “buffet

style” IT •  Move many users to internal or external cloud •  Software should matter more, hardware less •  Measure, experiment, learn, and replicate •  Use computer modeling to anticipate effects

on cooling/power of ∆s in existing facilities

20  Copyright  Jonathan  G.  Koomey  2014  

Conclusions

•  What management can do –  I. Drive institutional change using metrics that

tie IT performance to business performance –  II. One boss, one team, one budget –  III. Use IT to transform IT

•  Summary: Make IT serve the business!

21  Copyright  Jonathan  G.  Koomey  2014  

IT should NOT be treated as a cost center, it should be a cost reducing

profit center that also improves corporate and customer

environmental performance

22  Copyright  Jonathan  G.  Koomey  2014  

For more details on the ongoing (Nov 10 to Dec 12, 2014) online class titled Data Center

Essentials for Executives, see http://goo.gl/K4kJG2

Also see my 2014 article titled Bringing

Enterprise Computing into the 21st Century: A Management and Sustainability Challenge

http://goo.gl/WYFBjb

23  Copyright  Jonathan  G.  Koomey  2014  

Watch Dean Nelson (eBay) talk about how companies can turn IT

into a profit center (35 mins): https://www.youtube.com/watch?

v=h6NJpHgReE8&feature=youtu.be

24 Copyright  Jonathan  G.  Koomey  2014  

A case study of a company that has been successful at tying its IT performance to business performance

Schuetz, Nicole, Anna Kovaleva, and Jonathan Koomey. 2013.

eBay: A Case Study of Organizational Change Underlying Technical Infrastructure Optimization. Stanford, CA: Steyer-Taylor

Center for Energy Policy and Finance, Stanford University. September 26. [http://www.mediafire.com/view/8ema554a2ho9ifj/

Stanford_eBay_Case_Study-_FINAL-130926.pdf]

25 Copyright  Jonathan  G.  Koomey  2014  

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